Commission to scrutinise UK-Swiss tax deal

The European Commission is to examine a bilateral agreement between the UK and Switzerland on the taxing of secret bank accounts.

The deal, announced on 26 August, follows a similar agreement announced last month between Germany and the Swiss authorities.

The European Union has been trying for many years to secure agreements with Switzerland on the exchange of savings information that would go significantly farther than the bilateral deals.

The bilateral arrangements do not require an exchange of personal information. Under the UK scheme, account-holders would be taxed and Swiss authorities would hand proceeds over to the UK, but the identities of the account-holders would not be revealed. The deal is expected to bring in about €7 billion to the UK.

A spokeswoman for the Commission said that officials were looking into the deal but could not confirm yet whether they were compatible with EU law.

She added: “We will also examine the new agreement in view of the impact on current discussions in Council on the Commission’s proposal to improve the EU savings-taxation mechanism.”

She said that the Commission remained “firmly committed” to the principles of automatic exchange of information at an EU level.

Accountants said that the agreements were sensible given that Switzerland remained determined to retain its levels of banking secrecy.

Chas Roy-Chowdhury, the head of taxation at the Association of Chartered Certified Accountants (ACCA), described both bilateral deals as “innovative”.

He said: “In the normative sense, the deals are not fair for EU taxpayers, but they are realistic deals and an important step towards getting finance ministries a significant part of the money that is owed.

“The bilateral agreements could cause some with Swiss accounts to move their money elsewhere, but tax evaders are starting to run out of friendly havens thanks to some good work by the various national governments.”